Kissan Sewa Sahkari Samiti Ltd., Siddharth Nagar V. Income Tax Officer, Basti

ITA 130/LKW/2023

AI Insights

The case involves Kisan Sewa Sahkari Samiti, Ltd., a cooperative society engaged in trading chemical fertilizers, which appealed against the order of the NFAC that dismissed their appeal for non-compliance. Initially, the Assessing Officer made a best judgment assessment under Section 144 of the Income Tax Act, 1961, due to the assessee's failure to file a return. The assessee later submitted various documents and claimed a deduction under Section 80P, which was not considered by the NFAC due to repeated non-compliance in providing necessary submissions. The ITAT, considering the circumstances, decided to remand the case back to the NFAC for a fresh assessment, emphasizing the need for substantial justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123046 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 27-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 142(1); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘SMC’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.130/Lkw/2023 Assessment Year: 2017-18 Kisan Sewa Sahkari Samiti, Ltd., Tetari Bazar, Navgarh, Siddharth Nagar- 272207 PAN: AABAK 5267H Vs. The Income Tax Officer, Basti. (Appellant) (Respondent) O R D E R PER SUDHANSHU SRIVASTAVA, J.M.: 1. This appeal has been preferred by the assessee against the order dated 28.02.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year (AY) 2017-18. 2. The brief facts of the case are that as per records, the assessee is a Cooperative Society registered under U.P. Sahkari Samiti Adhiniyam, and is engaged in the trading of chemical fertilizers. The notice u/s. 142(1) of the Income Tax Act, 1961 (hereinafter called the ‘Act’) was issued by the Assessing Officer Appellant by None (Adj. Application) Respondent by Shri Sanjeev Krishna Sharma, Addl. CIT (DR) Date of hearing 27/07/2023 Date of pronouncement 27/07/2023 I.T.A. No.130/Lkw/2023 2 on 21.03.2018 requiring the assessee to file return of income for the captioned assessment year. However, the assessee failed to furnish the return of income. Accordingly, the Assessing Officer proceeded to invoke the provisions of Section 144 of the Act and proceeded to make best judgment assessment in terms of said provisions. The Assessing Officer also issued notice u/s.133(6) of the Act to Urban Cooperative Bank Limited, Siddharthnagar calling for Know Your Customer (KYC), account opening form and bank account statement of the assessee, which was duly responded to by the said bank. Further, the assessee also submitted a reply in response to notices issued u/s.142(1) of the Act wherein, it was submitted that the assessee society, during the captioned assessment year, had earned profit of Rs.1,12,626/- whereas the gross turnover was Rs.62,08,864/-. The assessee also furnished documents in form of balance sheet, Trading and Profit & Loss account, copy of audit report, bank statements, stock register, salary bill register and bills/vouchers etc. The assessment was completed at an income of Rs.1,12,626/-. 3. Aggrieved, the assessee approached the ld. First Appellate Authority, challenging the assessment on the ground that the I.T.A. No.130/Lkw/2023 3 assessee had not been allowed the benefit of deduction u/s.80P of the Act. As per the impugned order, the assessee was required to furnish written submission online on seven different dates between 31.12.2020 and 24.02.2023. However, there was no compliance on the part of the assessee. The NFAC noted that although the assessee was given several opportunities, the assessee had not pursued the appeal and no details, documents or submissions had been provided by the assessee substantiating the grounds of appeal. After recording such observation, the NFAC proceeded to dismiss the assessee’s appeal. 4. Now, the assessee has approached this Tribunal, challenging the dismissal of its appeal by the NFAC and the following grounds have been raised in this regard: “1. Because, The learned A O has accepted the status of assessee as cooperative society and accepted the books of account. But, The action of learned A.O. is not justified by not giving the deduction of section 80P of Income Tax Act for which the assessee is rightly entitled to. 2. Because, the learned CIT (Appeals) has erred in overlooking and in summarily rejecting the detailed statement of facts submitted along with memorandum of appeal, various documents and evidence placed like trading & profit & loss account along with stock Register Salary Bill Register and Bills Vouchers. I.T.A. No.130/Lkw/2023 4 3. That the appellant seeks permission to modify and/or add any other ground or grounds of appeal as the circumstances of the case might require or justify.” 5. None was present on behalf of the assessee-appellant when the appeal was called out for hearing. However, an application seeking adjournment signed by one Mr. Ashwani Jaiswal, Chartered Accountant was placed before us seeking adjournment of the case. However, there was no Power of Attorney of the said Chartered Accountant on record. 6. Looking into the facts of the case, I deem it appropriate to reject the adjournment application and proceed to hear the appeal ex-parte qua the assessee. It is seen that the assessee did not avail of the opportunities (as many as seven times) which were granted to it by the NFAC and no written submissions were filed. The NFAC has noted in the impugned order that although the assessee had submitted a communication which stated that the assessee was not willing to opt for ‘Vivad Se Vishwas Scheme’, 2020, the case may be decided on merits based on Statement of Facts and Grounds of Appeal. It was further submitted by the assessee that the assessee was willing to provide any other documents, if required, to decide the case on merits. Thereafter, since there I.T.A. No.130/Lkw/2023 5 was no compliance on the part of the assessee, the NFAC proceeded to dismiss the appeal of the assessee. 7. The ld. Senior Departmental Representative has strongly argued that since there was non-compliance by the assessee before the NFAC on as many as seven occasions, the assessee’s appeal should be dismissed at the very threshold itself. 8. I have gone through the record and have also given a thoughtful consideration to the arguments advanced by the ld. Senior Departmental Representative. It is undisputed that the assessee has not made any compliance before the NFAC. Further, as per the record, the assessee had not filed any Return of Income when called upon to do so by the Assessing Officer and had only later on submitted documents like balance sheet, profit & loss account, bills and vouchers etc. Subsequently, the assessee decided to stake a claim for deduction u/s. 80P of the Act before the ld. First Appellate Authority but even before the NFAC no documents were filed to substantiate the claim. Although, the assessee has been utmost reckless in pursuing its interest before the ld. First Appellate Authority, on the peculiar facts of this case and in the interest of substantial justice, I deem it appropriate to restore the file to I.T.A. No.130/Lkw/2023 6 the Office of the NFAC with the direction to adjudicate the issue afresh after giving adequate opportunity to the assessee to present its case. I also caution the assessee that should the assessee fail to avail opportunity now being granted, the NFAC shall be at liberty to pass a speaking order, in accordance with law, even ex-parte qua the assessee. 9. In the final result, the appeal filed by the assessee stands allowed for statistical purposes. (Order pronounced in the open court on 27/07/2023) Sd/- (SUDHANSHU SRIVASTAVA) Judicial Member Dated: 27/07/2023 Aks Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow Asstt. Registrar